Millionaires Go Missing

[thundley4]

Maryland's fleeced taxpayers fight back.
Here's a two-minute drill in soak-the-rich economics:

Maryland couldn't balance its budget last year, so the state tried to close the shortfall by fleecing the wealthy. Politicians in Annapolis created a millionaire tax bracket, raising the top marginal income-tax rate to 6.25%. And because cities such as Baltimore and Bethesda also impose income taxes, the state-local tax rate can go as high as 9.45%. Governor Martin O'Malley, a dedicated class warrior, declared that these richest 0.3% of filers were "willing and able to pay their fair share." The Baltimore Sun predicted the rich would "grin and bear it."

One year later, nobody's grinning. One-third of the millionaires have disappeared from Maryland tax rolls. In 2008 roughly 3,000 million-dollar income tax returns were filed by the end of April. This year there were 2,000, which the state comptroller's office concedes is a "substantial decline." On those missing returns, the government collects 6.25% of nothing. Instead of the state coffers gaining the extra $106 million the politicians predicted, millionaires paid $100 million less in taxes than they did last year -- even at higher rates.

No doubt the majority of that loss in millionaire filings results from the recession. However, this is one reason that depending on the rich to finance government is so ill-advised: Progressive tax rates create mountains of cash during good times that vanish during recessions. For evidence, consult California, New York and New Jersey (see here).

The Maryland state revenue office says it's "way too early" to tell how many millionaires moved out of the state when the tax rates rose. But no one disputes that some rich filers did leave. It's easier than the redistributionists think. Christopher Summers, president of the Maryland Public Policy Institute, notes: "Marylanders with high incomes typically own second homes in tax friendlier states like Florida, Delaware, South Carolina and Virginia. So it's easy for them to change their residency."

All of this means that the burden of paying for bloated government in Annapolis will fall on the middle class. Thanks to the futility of soaking the rich, these working families will now pay Mr. O'Malley's "fair share."

  WSJ

New York is also seeing this happen.  What's to stop the uber-wealthy from leaving the US altogether if 0bama and the DemonRats continue their class war upon the wealthy?

[NHSparky]

And it's been happening in CA for years.  Surprise, surprise, DUmmies.

[5412]

  WSJ

New York is also seeing this happen.  What's to stop the uber-wealthy from leaving the US altogether if 0bama and the DemonRats continue their class war upon the wealthy?

Hi,

One does not have to be a millionaire to feel the pain of state income taxes.  We lived in GA when they passed their state income tax law and it was very soon before those in the middle class were paying a whole lot more taxes because property taxes, sales taxes etc never went down.  It did not take me long to realize I did not want to live in a state that had any state or local income taxes because you are just having more of your money confiscated by the government.  Since then I have lived in TX and FL.

We used to live less than two miles from the FL/AL border in the 1990's and our friends in AL would ask why we lived in FL when we could live in AL and pay a whole lot less in property taxes.  Every time I compared them, our home in FL was probably taxed $1,000 more than a comparable home in AL, yet the income tax rates in AL (this is from memory) was something like 5%.  To keep the math simple, if one had a taxable income of $100,000 which is not unusual for a family where both the husband and wife work, they would be paying $5,000 in AL income tax.......to save $1,000 in property taxes. 

If anyone has the type of job where they can live anywhere they choose, as I did, they would do well to take a look at those states which have no income taxes.  Best part about FL is it would take and amendment to the Constitution to have an income tax and that would get shot down by the seniors every time.  For awhile TX had some pretty hefty property tax increases but I understand they have had some revolts and it is supposedly somewhat under control.

regards,
5412

[Zathras]

There is nothing more mobile than a rich person and their money.